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Richard Kuhr's Blog

By Richard Kuhr | Agent in San Mateo County, CA

How to Raise Your Credit Score

Some of this may seem obvious, but here some quick tips to improve your credit:

To improve your credit score, pay your bills on time. Your most recent payment history, especially in the last two years, is the most predictive part of your credit rating, comprising approximately 35% of a credit score. Do not apply for any type of credit unnecessarily. It lowers your credit score because it's a sign you could be taking on more debt.

Bankruptcy (Chapter 13 or 7) is the worst thing that can happen to your credit score and will take between seven to 10 years to come off your credit history. A foreclosure, short sale, deed-in-lieu or tax lien significantly lowers a credit score. Paying a bill 30 days late will noticeably drop your score, but 90 or 120 days late will cause an even greater decline.

Avoid using more than 50% of your available credit for any current account, and focus on reducing credit card balances before paying off installment debts, like student loans or car loans. Credit scores track the age of the oldest account and the average age of all accounts. Longer credit history helps raise a credit rating, so avoid closing out credit accounts with long histories, because they're most important.

Your credit score is a shifting number that changes frequently. Consider an online credit monitoring service that provides constant access to your credit history and score. I recommedn checking you cresit at least every 3 to 6 months for errors, possible identity theft, and your overall rating.

Comments

By J. Mario Preza, CRB, CDPE,  Fri Mar 25 2011, 12:56
Great insights. However, I would like a clarification on the BK, I have had the opportunity of helping at least two families with BK on their credit to buy again within 2 years after gone through that experience. Is BK seen less damaging when buying a house?
 
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